Inside KDP’s Conversation at Barclays

At the Barclays Global Consumer Staples Conference in Boston on Sept. 10, KDP Chief Executive Officer Tim Cofer and Chief Financial Officer Anthony DiSilvestro joined investors for a fireside chat focused on our performance, priorities and the progress we’re making as we prepare for our next chapter. Here are four key takeaways from the discussion.

1. Our beverage business continues to build momentum

Tim and Anthony shared why they remain confident in the long-term growth opportunity for our future Beverage Co. They pointed to the strength of the nearly $300 billion North American refreshment beverage category, continued momentum in carbonated soft drinks (CSDs) and our growing presence in attractive spaces such as energy, sports hydration and premium water. They also highlighted how our flexible build, buy and partner approach has helped us expand into growth categories through brands and partnerships such as GHOST, Bloom, C4 and Electrolit.

Tim also discussed how we’re unlocking growth across the portfolio by giving brands more distinctive positioning and stronger connections with consumers. He highlighted Dr Pepper, a nearly $6 billion retail sales brand and the No. 2 trademark in CSDs, alongside the continued momentum of Dr Pepper Zero Sugar. He also pointed to Canada Dry’s “Dry Time is My Time” campaign, centered around moments when wants to unplug and relax, and the Fruit Splash platform, which he said has been highly incremental to the base business and is driving overall trademark sales. He also highlighted 7UP’s recent transformation into a more lime-forward brand supported by a new formula, refreshed visual identity and new marketing campaign. And, he noted that KDP has grown from essentially zero share in energy four years ago to more than a 10% share today, based on the most recent scanner data.

2. Our route-to-market advantage continues to set us apart

Tim discussed the role our direct store delivery network plays in helping brands reach consumers and customers. He highlighted investments to strengthen the system through expansion into high-growth categories such as energy, sports hydration and prebiotic soft drinks. Since the formation of KDP, the company has completed more than 25 distribution acquisitions to selectively expand our network. He also noted the investments we’ve made in handheld systems and digital tools supporting order taking, order fulfillment and selling, helping frontline employees focus on value-add activities. These capabilities help ensure products are available where consumers shop, strengthen customer relationships and support growth across both owned and partner brands.

3. Our coffee business is performing to plan while building for the future

Tim and Anthony also shared an update on our combined coffee business following the acquisition of JDE Peet’s. Tim described coffee’s aggregate second-quarter performance as solid, while acknowledging weaker-than-anticipated results in U.S. coffee amid significant green-coffee and tariff pressures. He said the company expects a much-improved second half for U.S. coffee, supported by a more favorable cost picture, brewer shipments, household penetration, pod trends and initial integration synergies. Looking ahead, they reinforced the opportunity represented by Global Coffee Co., which will bring together leading positions across 35 markets and a broad portfolio spanning geographies, formats and channels.  They highlighted opportunities already underway, including extending  Peet’s nationally using Keurig’s scale and customer relationships, expanding legacy Keurig brands into additional coffee formats and exploring the longer-term potential to bring the upcoming Keurig Alta system beyond the U.S.

4. We’re making meaningful progress toward separation

Tim and Anthony shared that our teams are making strong progress against key milestones while remaining focused on delivering business performance and serving customers and consumers. For example, following the acquisition of JDE Peet’s in April, the company moved quickly to “one invoice, one sales team, one truck” for its combined U.S. coffee business, begun purchasing green coffee on a combined basis and started capturing cost synergies. At the same time, we’ve named key leaders for our future companies, expanded board recruitment efforts and advanced critical separation planning activities. Tim also noted continued progress in establishing leadership teams and boards for both companies, developing their future names and corporate identities and preparing the strategic frameworks and investor narratives that will introduce them to the market.

For the full conversation, visit here.

FORWARD LOOKING STATEMENTS

Certain statements contained herein are “forward-looking statements” within the meaning of applicable securities laws and regulations. These forward-looking statements include those preceded by, followed by or that include the words such as “outlook,” “guidance,” “anticipate,” “enable,” “expect,” “believe,” “could,” “confident,” “estimate,” “feel,” “continue,” “ongoing,” “forecast,” “intend,” “may,” “on track,” “plan,” “positioned,” “potential,” “project,” “should,” “target,” “will,” “would” and similar words, phrases, or expressions and variations or negatives of these words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These statements are based on the current expectations of our management, are not predictions of actual performance, and actual results may differ materially. 

Forward-looking statements are subject to a number of risks and uncertainties, including the factors disclosed in our Annual Report on Form 10-K and subsequent filings with the SEC. Our actual financial performance could differ materially from the projections in the forward-looking statements due to a variety of factors, including, but not limited to, (i) the inherent uncertainty of estimates, forecasts and projections, (ii) global economic uncertainty or economic downturns, (iii) tariffs or the imposition of new tariffs, trade wars, barriers or restrictions, sanctions, geopolitical disturbances and conflicts, or threats of such actions and related uncertainty, (iv) the risk that our financial performance may be better or worse than anticipated, (v) risks related to the completion of the separation of our beverage and coffee portfolios in the anticipated timeframe or at all, (vi) our incurrence of significant debt or our entry into other funding alternatives, in each case, which funded the acquisition of JDE Peet’s, which may result in dilution to our stockholders or introduce complexity to our capital structure, (vii) additional risks associated with the acquisition of JDE Peet’s and those geographies, countries and associated governments where JDE Peet’s currently operates, (viii) our ability to successfully integrate JDE Peet’s into our business, or that such integration may be more difficult, time-consuming or costly than expected, (ix) constraints on management’s attention to operating and growing our business during the execution of the integration of JDE Peet’s and the separation, (x) the potential downgrade of our credit ratings as a result of debt incurred and/or assumed in connection with the acquisition of JDE Peet’s and the separation, (xi) the possibility of negative impacts on business relationships in connection with the acquisition of JDE Peet’s and the separation, (xii) the risk that the separation incurs significant additional costs, (xiii) the risk of potential litigation and regulatory actions, (xiv) risks related to negative effects of the acquisition of JDE Peet’s and the pendency of the separation on our share price and (xv) the ability to achieve the anticipated strategic and financial benefits from the separation. We are under no obligation to update, modify or withdraw any forward-looking statements, except as required by applicable law.